Experts believe that a common African cryptocurrency can boost trade and support growth according to Covid-19-emerging countries
Experts believe that a common African cryptocurrency can boost trade and support growth according to Covid-19-emerging countries
Some economic experts from Africa have suggested that the continent now needs a common cryptocurrency and an integrated capital market to boost trade and maintain growth.
The meaning of a common crypto
experts in the African economy argue that a common cryptocurrency together with an integrated capital market is necessary to boost trade and maintain growth on the continent after the Covid 19 crisis.
according to A Press release edited by the African Development Bank Group (ADBG), these experts had brought their arguments in a discussion about the reform of the African financial system.
One of the experts cited in the explanation, AnoUar Hassoune, professor of finance and CEO of the West Africa Rating Agency, argued that joint cryptocurrency had the potential to reduce business costs. He explained:
We have to develop a cryptocurrency that is acceptable for every Member State. It is better to do this on a continental level, and we have the know-how for it. It is a question of governance, no question of technology.
hassoune also suggested that such a cryptocurrency could serve as an alternative to monetization of some of the foundations of the continent such as gold and other raw materials.
In the explanation, Emmanuelle Riedel Drouin, head of the department for economic and financial transformation at the Agence Française de Développement, is also cited. Although the expert supports the idea, she warned that conditions must be fulfilled before such a common crypto comes onto the market. She explained:
"We should not forget that there is a lot to do with the digital infrastructure, the development of payment systems, the interoperability of the payment systems, so there is a lot to do in cooperation with the financial institutions for digitizing delivery and payment channels."
Africa needs a functioning integrated capital market
Drouin added that the central banks play a crucial role, but it is still important for the economies to diversify the sources of financing in order to reduce the dependency on them.
Although many African countries have spoken out against privately issued cryptocurrencies, some have shown interest in developing their own digital currencies. In fact, one of these countries, Nigeria, has already introduced its digital currency, while Ghana is expected to do so too. It is the creation of such different digital currencies that some experts fear that it will reduce the possibility that Africa has its own common goal of cryptocurrency.
In the meantime, the explanation also quotes Augustine Ujunwa, an economist at the West African Monetary Institute, which supports a well -functioning integrated capital market. He explained:At the moment, our markets are small, our countries are small and we have to pursue a regional approach to integrating the markets. Before we get there, however, we have to harmonize our laws, regulations and protocols for our fintech and digital systems.
In terms of the role of central banks, the economist suggested that they should now begin to think about innovative ways to finance the critical sectors of the economy.
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